The Reserve Bank of India (RBI) appointed Yogesh Dayal, general manager, as an additional director on Ratnakar Bank’s (RBL) board last week. Meanwhile, Vishwavir Ahuja, managing director and chief executive officer of RBL, went on medical leave. After this announcement, shares of RBL Bank hit a 52-week low at Rs 132.35, down almost 23.2 per cent in Monday’s intraday trade.
Analysts sounded cautious about the road ahead for the bank and suggested that the December quarter might provide much-needed emotional support. RBI tried to allay investors’ fears saying that the bank remained on a solid footing.
The development comes at a time when RBL is grappling with a surge in soured loans to consumers during the pandemic. This led the lender to boost provisions which led to a first-quarter loss. However, the bank returned to profit in the quarter ended September 30. At the same time, RBI Governor Shaktikanta Das has shown interest to ensure financial stability by seizing control of shadow lenders and banks.
However, the recent events have impacted RBL’s customers to some extent. Let’s look at what it means for the customers.
What does this mean for the customers?
RBI has appointed an additional director to RBL’s board. So, everything is definitely not great. However, RBI has confirmed that the bank’s financial health is stable and it is well-capitalised. The vital ratios of the bank, that is capital adequacy, provision coverage, liquidity coverage, remain in good shape.
“As a customer, you might want to keep track of news, financial results and other announcements from the bank. Things will surely settle down and the bank will improve its functioning to the entire satisfaction of the regulator,” says Raj Khosla, founder and managing director of MyMoneyMatra, a loan aggregator.
Do customers need to be worried?
Given the recent statement by RBI, this does not seem to be a worrisome situation. “I would say customers need to be cautious in the near term and take a few minor steps to diversify their FD portfolios,” says Khosla.
Can you compare this with the Yes Bank incident?
The two situations are actually very different. Yes Bank was hit by considerable wrongdoing at the highest level. “There is clearly no such challenge at RBL. In fact, the bank is run by thorough professionals, with high-level ethics,” says Khosla.
What do you need to keep in mind as a customer?
Caution is the keyword. As a customer, perhaps, you could look at short-term deposits as opposed to long-term ones, until the situation settles down. In case, all your savings are concentrated, then it might be worthwhile considering some diversification.
“Thankfully, the bank’s capital and liquidity position is strong as confirmed by the management. Any other concerns of the regulator will probably be addressed in the coming quarters,” adds Khosla.
